Topic Title Here

1
Introduction to Business Chapter 29 Fundamentals
of Credit
Essential Question How is credit important to
our economy?
2
Objectives
1.2 Business Environment (C) Students will
understand the development and structure of
business environments. They will demonstrate
competency by identifying the dynamic components
of business structure and its relationship to the
global business environment. 1.2.2 Business
Lawdescribe the sources of law, the structure of
the court systems and ways in which these laws
apply to basic consumer and business
transactions. 1.2.4 Competitive
Environmentexplain the economic effects of
competition on a business in an international
marketplace. 1.2.8 Interrelationships of Business
Operationsdiscuss the interrelationships between
different business lines as they relate to
finance, tax, operations, human resources,
marketing, production, management, and the legal
environment. 1.4 Economics and Financial Concepts
(C) Students will understand the impact of
global and domestic businesses, financial
concepts, and integrated business models. They
will demonstrate competency by using appropriate
technology and other resources to solve business
problems. 1.4.1 Business/Financial
Relationshipsanalyze the financial implications
of various functions of a business and describe
how they interrelate 1.4.2 Demographicsinterpret
demographic data and explain its impact on the
economy. 1.4.3 Economic Cultureexplain how
culture affects economic practice and business
ethics
3
Chapter Objectives

• Explain what credit is and how it is used.
• Distinguish loan credit, sales credit, and trade
  credit.
• Discuss how credit is granted, including the
  three Cs.
• Cite advantages and disadvantages of using credit.

4
What credit is p.399

• Credit is the privilege of using someone elses
  money with the obligation to repay it at a future
  time.

5
Types of Credit p. 400

• Consumers use credit to buy cars, clothing, and
  furniture
• Businesses use credit to finance new equipment,
  expand facilities, and to take care of temporary
  cash needs.
• Governments borrow money to build roads and
  schools.

6
Users of credit p.400

• You can borrow money from a financial institution
  loan credit.
• You can charge a good or service at the time of
  purchase -- sales credit.
• A business can receive goods now and pay for them
  later trade credit.

7
Granting of creditp.401

• a. A business considers a persons
• Character (honesty and willingness to pay debts).
• Capacity (the ability to pay debts).
• Capital (the value of the persons possessions).

8
Benefits of credit p. 402

• Credit used wisely
• Makes some buying more convenient.
• Gives the purchaser immediate possession rather
  than waiting until later.
• Allows buyers to take advantage of special sales.
• Establishes a persons credit rating.

9
Precautions for use of creditp. 404

• Credit is misused if it results in
• Overbuying.
• Careless buying.
• Paying higher prices in stores that grant credit.
• Incurring excessive debt.

10
Questions to askp. 405

• How am I benefiting from this use of credit?
• Is this the best buy I can make or can I shop
  around?
• What will be the total cost of my purchase,
  including the cost of charging?
• What would I save if I paid cash?
• Will the payments be too high considering my
  income?

11
Assignments

• Do Now
• Monday--Calculate Business Data p.408 31
• Tuesday--Calculate Business Data p.408 32
• Wednesday--Calculate Business Data p.408 33
• Read example and calculate answer in an Excel
  spreadsheet, show your work. Give a short
  explanation as to your answers.

• Workshop Discussion
• Communicate Business Concepts questions 12-16 p.
  406-7.
• Discuss questions with your group and write a
  brief answer to both questions

12
Homework

• Define Key Terms Develop your Business Language
  407.
• Answer Review your reading questions 1-9 p.406.
• The Resume Handbook for High School Students.